Question

In a free economy the central problems facing a society are solved by _________.

• A. market forces or price mechanism
• B. central planning committee
• C. central bank
• D. parliament

Answer 1

Answer: (A)

market forces or price mechanism

In a free economy the central problems or the problem of choice faced by an economy is solved by the free flow of two market forces-demand and supply. Thus, the market itself draw itself to the equilibrium level and solves the surplus and shortage problems.